Unfortunately that a Bishops Stortford residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the early years due to the loss of value being disguised by increases in the Bishops Stortford property market.Where your lease has approximately 90 years left, you need to start thinking about a lease extension. If lease term slips below 80 years, you will end up paying 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property Most leasehold owners in Bishops Stortford will be able to extend under the legislation; however a lawyer will be able to confirm if you qualify for an extension. In some cases you may not be entitled. There are also strict timeframes and procedures to be adhered to once the process is instigated and you will need to be guided by your lawyer throughout the process.
Leasehold residencies in Bishops Stortford with in excess of 100 years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Using our service gives you increased control over the value of your Bishops Stortford leasehold, as your property will be more valuable and saleable in relation to the lease length should you want to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Half a year ago Jacob, started to get close to the eighty-year mark with the lease on his first floor flat in Bishops Stortford. In buying his home 19 years ago, the lease term was of little significance. by good luck, it dawned on him that he would soon be paying an inflated amount for a lease extension. Jacob arranged for a lease extension just under the wire in July. Jacob and the landlord who owned the flat above ultimately settled on the final figure of £5,000 . If he failed to meet the deadline, the price would have gone up by a minimum £1,125.
In 2010 we were approached by Mr Luke Robinson who, having purchased a ground floor flat in Bishops Stortford in April 1996. The question was if we could estimate the premium would likely be for a ninety year extension to my lease. Identical flats in Bishops Stortford with 100 year plus lease were valued about £264,000. The average amount of ground rent was £60 collected yearly. The lease ended in 2079. Having 53 years as a residual term we calculated the compensation to the landlord for the lease extension to be between £37,100 and £42,800 exclusive of legals.
In 2009 we were called by Mr L Brooks who, having was assigned a lease of a studio apartment in Bishops Stortford in March 2011. We are asked if we could approximate the premium could be for a ninety year lease extension. Comparable flats in Bishops Stortford with 100 year plus lease were valued about £225,400. The mid-range amount of ground rent was £45 collected per annum. The lease concluded in 2090. Having 64 years outstanding we calculated the compensation to the freeholder for the lease extension to be between £15,200 and £17,600 plus fees.